Grand Forks Herald: Tax Cuts Are A "Libertarian Extreme"

It seems the editorial page at the Grand Forks Herald has become more and more shrill in its denunciations of limited government ideals. Though the Herald has always been to the left of the average North Dakota voter, normally the editorials can be counted to be above the sort of name-calling and invective displayed in editorials by the paper’s sister publication in Fargo.

That seems to be changing. In today’s editorial the Herald, while arguing against a proposal to reform North Dakota’s oil extraction tax, denounces pushes for tax cuts as “libertarian extremes.”

Proponents of such tax cuts typically make two claims. The first argues that the government has no business taking the money because the money isn’t the government’s in the first place.

But North Dakotans have little interest in such libertarian extremes, as they’ve shown repeatedly in recent years by rejecting proposals to slash their own income and property taxes. And if they value government services enough to keep their own taxes in place, why would they be in a hurry to cut taxes paid by oil companies?

I don’t think the idea that the wealth we individuals create belongs to us, not the government, is all that extreme. We citizens create our wealth, and through the democratic process we agree to give up some of that wealth to fund government which, in turn, creates and enforces laws. I think (I hope) most in North Dakota feel that way rather than the opposite, which is that the wealth we keep after taxation is ours only as a gift from the government.

Because that’s extreme, to my mind.

But as to this supposed opposition to tax relief in North Dakota, it’s worth remembering that since the 2009 legislative session (which came after a hotly-debated 50% cut in income taxes was on the ballot) cut income taxes as has every legislative session since. And this legislature may cut them even further. Rep. Scott Louser has a bill to eliminate personal income taxes entirely for two years. Short of that, Rep. Craig Headland has a bill to cut them by about 75%. The conventional wisdom in Bismarck is that one of these two measures will likely pass. But even if that doesn’t happen, it seems to be a surety that income taxes will be reduced.

Is that extremism? According to the Herald it is. If there has been resistance from North Dakotans to tax relief proposals put on the ballot, that owes a lot not to opposition to tax relief but to the triangulation of elected leaders who use the worthless “three legged stool” analogy to keep voters rejecting the tax relief in front of them in favor or some other sort of tax relief.

It would be a mistake to believe that most North Dakotans are satisfied with their current levels of taxation as the state is awash in revenues.

As to the issue of the extraction tax, specifically, the Herald argues that there might be a convincing case to be made for it if the tax were hurting oil production. “[W]hatever dampening effect the tax is having on oil production is negligible,” writes opinion editor Tom Dennis on behalf of the Herald. “That may change one day; if it does, North Dakota should respond. But not before.”

Whatever happened to being proactive in public policy? It may not be having an impact on oil production now, but the oil markets in America are getting more competitive all the time. The oil industry doesn’t have to exploit the state’s oil reserves now. They could leave that oil in the ground and decamp to friendlier tax (and meteorological) climes quicker than the state could respond with reforms. Far too many scoff at this notion, but it’s worth remembering that if our oil revenues plummet the pressure on taxes in the state is going to be upward, not downward.

I know it’s “big oil” and we’re all supposed to hate “big oil.” I know the popular attitude to have when it comes to oil taxes is “fleece them while the fleecing is good.” But how about we have an adult conversation about the issue beyond those tired political tropes, and instead engage in a little forward thinking?